The government on Tuesday extended the controversial tax amnesty scheme for regularising non customs-paid vehicles till April 6, 2013.

Caretaker Prime Minister Mir Hazar Khan Khoso approved the summary of Federal Board of Revenue (FBR), giving six days extension for regularising non customs-paid vehicles all over the country. The FBR issued notification in this regard stating that amnesty scheme is extended till April 6, 2013. Earlier, the Federal Board of Revenue introduced the amnesty scheme for vehicles, which are brought into the country without payment of custom duty, to legalize the smuggled vehicles by March 31st March by paying nominal duty.

Sources said that FBR has so far collected Rs 10 billion in taxes for regularising 34,000 non customs-paid vehicles in Pakistan under the amnesty scheme, which would further increase in six days period. Despite strong opposition from various circles, FBR introduced amnesty scheme for vehicles to generate additional revenue, as tax department is facing huge revenue shortfall within the ongoing financial year 2012-2013.

“The tax amnesty scheme is helping additional revenue during the current fiscal year”, said an official of the tax department while talking to The Nation. He further said that there are a total of 2.8 million vehicles plying on roads nationwide and government is giving an opportunity to legalize them by paying tax/duty.

Meanwhile, the Federal Tax Ombudsman has taken notice of news that some elements are registering vehicles of Japan, Dubai and other countries in Pakistan under tax amnesty scheme. According to the reports, some elements are misusing tax amnesty therefore, FRO has taken notice and sought reports from FBR.

Earlier, the Competition Commission of Pakistan (CCP) and All Pakistan Motor Dealers Association (APMDA) showed concerns over the said amnesty scheme, as they said this scheme would lead to encouraging unlawful activities in the country. The Competition Commission of Pakistan in its policy note asked the government to immediately withdraw the tax amnesty scheme for smuggled vehicles, terming the policy a violation of competition laws besides becoming a source of expansion of grey market in the country.

All Pakistan Motor Dealers Association (APMDA) said the amnesty scheme would discourage legal car imports that bring revenue for the country. The amnesty scheme to allow owners of non-customs paid vehicles to legalize their smuggled cars after paying nominal duty and taxes will promote unlawful activities in the country. “If the government encourages car smuggling like this, we should also leave our business and start smuggling vehicles from Afghanistan,” APMDA said.

The Federal Board of Revenue (FBR) official said that it would take action against all unregistered vehicles in the country after the expiry of the amnesty scheme on 6 April 2013.